Bottle redemption centers struggling

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The number of bottles and cans being returned for the nickel deposit has dropped in Massachusetts, in part because redemption centers are rapidly going out of business after two decades without an increase in their handling fees.

Since 1995, the number of centers has plummeted by more than half, and during the same period, the redemption of cans and bottles has slid from 87 percent of eligible containers to about 68 percent this year.

Redemption center owner Mark McDonald said it no longer makes sense for him to spend seven days a week sorting tens of thousands of empty cans and bottles, organizing them into mounds of stench-filled bags, and ferrying them across the state to be recycled.

Since he opened Bridgewater Bottle and Can Return in 1995, McDonald’s labor costs have more than doubled, as have his rent, utilities, insurance, and fuel for his truck. He said he no longer makes a profit.

“At this point, I don’t know how much longer we can survive,’’ said McDonald, who has been holding out for the state to increase the handling fee, through revising the bottle law or administrative action. “We need something done right away.’’

The declining value of a nickel and an increase in curbside recycling have also contributed to the fall in the redemption rate, state officials said, though it is unclear how much each of the factors is to blame. Opponents of changing the bottle law say redemption sites are an expensive way to recycle. Rather than raise the handling fee, critics say, more should be done to encourage curbside pickup of bottles and cans.

State officials acknowledge the pain of redemption centers, which have not had an increase since 1990 in the 2.25-cent fee distributors must pay them for every bottle returned. They note the disparity between neighboring states with similar bottle laws, such as Maine, where distributors are required to pay at least 4 cents per bottle returned, and Vermont and New York, where the bottle companies pay at least 3.5 cents. Those states also require distributors to pick up the cans and bottles from redemption centers, reducing their fuel costs.

Ken Kimmell, commissioner of the state Department of Environmental Protection, said the administration is waiting for the Legislature to pass an update to Massachusetts’s 30-year-old bottle law, which would expand the nickel deposit required on sales of carbonated soda, beer, and malt beverages to include bottled water, juices, and sports drinks.

Proponents of expanding the bottle law say it would raise an estimated $58 million - $20 million more than the state earns under the current law for environmental programs - from deposits that are not returned when people put their drink containers in recycling bins or the trash or toss them on the ground. Backers say it would further reduce litter and increase the recycling rate, and redemption centers would get a boost from doubling their volume in addition to increasing their handling fee.

But efforts to pass a revised bottle bill during the past decade have failed repeatedly, as opponents and key lawmakers say it amounts to a tax and increases the price of beverages. The increase in the handling fee would be paid for by the bottling companies, which could pass the cost on to consumers.

Kimmell argues that strong backing from the administration could make it more likely that the bill will pass in the coming year. He notes that polls have shown popular support for expanding the bottle bill and that a recent department study of prices found beverages frequently cost more in New Hampshire, which lacks a bottle-redemption law, than in Massachusetts and Maine.

“It’s true we haven’t been able to bring it to the finish line, but we’re not ready to conclude the bottle bill is dead,’’ Kimmell said.

A unilateral increase in the handling fee for redemption centers, he said, could encourage fraud. He favors a comprehensive new bottle bill that would provide his department authority to take legal action against anyone violating the law.

“The advantage of doing it as a package is that we get allegations that bottles are coming from other states that don’t have the deposits, and when you raise the fees, you make that more likely,’’ Kimmel said. “But at some point, if the bill doesn’t pass, we will consider a unilateral increase in the handling fee.’’

Opponents of the bottle law say expanding curbside recycling has made redemption centers obsolete, and that helps explain why so many are going out of business. “We’re opposed to anything that would perpetuate the bottle law, which is really an outdated system,’’ said Chris Flynn, president of the Massachusetts Food Association, which represents supermarkets across the state.

“The fact is that adding to the handling fees would add additional costs to a system that is much more expensive than curbside recycling. The reason the system isn’t working is because it’s extremely costly.’’

Still, even though nearly half of all communities in the state now have some form of curbside recycling, the overall recycling rate of municipal waste in Massachusetts has crept up only slightly. Last year, the state recycled 37 percent of municipal waste, up from 32 percent in 1995.

Phillip Sego, a spokesman for the Massachusetts Sierra Club, which has long lobbied for an expanded bottle law, noted that curbside recycling does not prevent water bottles, soda cans, or other “on-the-go’’ containers, which have increased substantially over the years, from ending up as litter or in trash cans at parks, the beach, or anywhere away from home.

“The redemption centers play a crucial role in making the bottle bill succeed,’’ Sego said, noting that last year they recycled more than 1.4 billion cans and bottles. “But if they can’t keep up with the cost of living, they will continue going out of business, and that could make the whole system collapse.’’ He said the closing of centers is “definitely a driving factor’’ in the declining redemption rate.

Among those who could not make ends meet was Michele McLean, who in 2007 sold Hyde Park Bottle and Can.

“We just weren’t making any money,’’ she said. “The state wasn’t being fair to us.’’

Some redemption centers have resorted to paying their customers four cents per bottle, instead of a nickel, as a way of earning extra cash. But that practice can drive away customers.

In Framingham, Tom Casey, who has owned Bottle Bill’s Redemption Center since 2003, saw volume drop 25 percent after he began paying his customers a penny less.“We just can’t make this work anymore,’’ he said.